Now this is taking one for the team

Oklahoma State insures lives of 25 aging donors for $10 million each to help fund athletics.

Billionaire T. Boone Pickens is being credited with a novel -- some would say morbid -- financing plan that his fellow Oklahoma State University fans hope will lift their beloved Cowboys football team to the top of the Big 12 Conference standings.

Over the course of the last year, Pickens, 77, steered his alma mater's athletics department to buy life insurance policies for himself and a posse of aging Cowboys donors. The department hopes to net about $250 million from the proceeds by the time the last donor dies.

The insurance program is in addition to about $200 million in cash that Pickens has donated in recent years so Oklahoma State can better compete against rival Big 12 football powerhouses Texas, Nebraska and Oklahoma.

Although the Cowboys have won 48 national NCAA titles in such sports as wrestling and golf, that record isn't good enough for the many Cowboys fans who care only for Oklahoma State's performance on the gridiron.

The Pickens-inspired life insurance plan is seen as a way to help keep the university's athletic department funded over the next few decades.

"Until Boone Pickens entered the picture for OSU, we were merely a participant in the Big 12 -- not a competitor," said Mike Holder, Oklahoma State's athletic director.

Oklahoma State's insurance plan, which took about a year to piece together, underscores the sometimes controversial methods that colleges are considering to find new sources of revenue to fund coaches' salaries, athletic scholarships, capital improvements and other expenses generated by major college sports.

Many wealthy donors remember college athletics in their estate planning. But having a university bundle up a group of donors and buy life insurance on them is a new twist.

"In recent years, there's been a flurry of new charitable-related products coming from the insurance field," said Chris Yates, director of planned giving at Stanford University. "I've had to scramble just to keep up with how they work."

Stanford has yet to consider a Pickens-like insurance plan and probably would not unless it could outperform alternative investments, Yates said. That would mean matching or exceeding Stanford's 14.8% average annual return over the last decade.

The Cowboys borrowed $20 million from a booster association to pay the premiums for $10 million in whole-life insurance policies for each of the 25 or so carefully selected donors, including Pickens, who are between the ages of 65 and 85.

Pickens got the idea about three years ago after a doctor judged him to be young and healthy enough to qualify for additional life insurance. Pickens, who made his fortune as a corporate raider, investor and oil man, did not need more coverage. But the 1951 Oklahoma State graduate -- with a geology degree -- soon was itching to leverage the newly discovered "asset."

After learning that some churches were generating revenue from life insurance policies that had been purchased for aging members, Pickens floated the concept to Holder, a fellow alumnus who served for decades as golf coach before being named athletics director in 2005.

Oklahoma State's donors were selected because their age, gender and health "best matched the university's needs," said John Lee, chairman of Dallas-based Management Compensation Group, which is managing the insurance program. To put it less delicately, the donors selected are expected to die in a timely manner to generate the $250-million payout.

Only two of the prospective donors hung up when Larry Reece, Oklahoma State's executive director of major gifts and development, broached the subject.

Mark Mallady, executive vice president of Collegiate Financial Services, a Williamsburg, Va.-based firm, agrees that other college athletic department fundraisers soon will be working the phones.

"Their thinking is that 'we've got donors giving us millions of dollars each year,' " he said. "But what happens when the donors die? Is there a plan or a policy to replace what they've been giving?"

Pickens concurred: "You will see other [similar] deals in the near future" at other nonprofit organizations.

Cowboys fans are betting that Holder can do for football what he accomplished on the golf course. His teams won eight NCAA national championships, and the program used donations from Pickens and others to build a Tom Fazio-designed course on the Stillwater campus, plus a multimillion-dollar golf endowment.

The $200 million that Pickens has donated is funding a large part of the $250-million athletic department building boom on OSU's campus. Pickens' name is now on the 1920s-era Oklahoma State stadium that before an ongoing renovation was jokingly called Rustoleum Stadium. The Cowboys also are adding indoor practice space for their baseball, softball, track, soccer, tennis and equestrian teams and a village where athletes will live.